1. When should I hire a bookkeeper?
The decision to hire a professional bookkeeper is usually triggered by a business owner’s experience of working late into the night, only to find that they’re still not keeping up with their bookkeeping duties. By this point, their books are usually out of order and whether they know it or not, they are often costing themselves money by paying more in taxes than they actually need to. Hiring a bookkeeper will help you to maximize the clarity of your company’s books so you have complete awareness of your income and expenses.
2. What’s the difference between an accountant and a bookkeeper?
To the untrained eye, bookkeepers and accountants may seem pretty much the same. They both record and maintain financial records for businesses. The truth, however, goes much deeper and is much more nuanced than a simple explanation would have you believe. In order to fully appreciate and understand what bookkeepers and accountants can do for your business, you first have to understand the duties of each job. Click here for an in-depth description of both professions.
3. What is my business’s legal entity?
This is a common question among many new, and even some seasoned business owners. Choosing from among the number of various different types of legal entities isn’t easy, and the process gets more complicated when you begin to look at the various administrative and tax advantages of each type of entity.
Add to that your potential to choose one entity for general business purposes and be treated as another type of entity for tax purposes, and you have a very confusing choice to make. We’re here to help you, so contact us today for a one-hour consultation.
4. What’s the importance of outsourcing my bookkeeping to a 3rd party?
Outsourcing your bookkeeping to a professional has many benefits. Primary among these benefits is preserving the integrity of your books.
Beyond that, outsourcing your bookkeeping to a professional helps to ensure that you are paying the proper amount in taxes, maximizing your profitability, and most importantly, that you have more time to focus on the day-to-day operations of your business.
5. What are the advantages/disadvantages of the tax preparer processing both my bookkeeping and taxes? Can’t I just have my accountant do my bookkeeping for me?
While there are some tax preparers who will also do your day-to-day bookkeeping for you, it is generally considered a best practice to separate duties between a bookkeeper and a tax preparer, because the job of a bookkeeper is much different than what is required of the tax preparer.
While it may be advantageous to have everything in one place, from the standpoint of only having one person to work with, there are far greater disadvantages to having one person handle both your bookkeeping and tax needs. The tax preparer is generally not an expert in bookkeeping, as they are spending most of their time on tax returns throughout the year, focusing mainly on the rules and regulations regarding tax law. Further, they normally charge more for bookkeeping services, while their efficiency is geared towards tax returns.
On the other hand, the bookkeeper is typically more detailed in nature, and provides timely reports throughout the year that will help the business owner understand how their business is doing, so they can grow their company and increase profitability.
By leveraging the skills of both professionals, you will have two people working on your account who are each experts in their field, providing you the best bookkeeping and tax services possible. Having two experts in your corner creates a system of checks and balances for your accounting records.
6. Will I still be able to keep control over my business if I outsource my bookkeeping to a 3rd party?
Yes, you will – your bookkeeper is there to provide you with assistance, and to keep up with the financial details of your operation, leaving you to spend time working on and growing your business. All decisions about the business remain with you.
7. What software does your bookkeeping work support?
At Qbookadvisors LLC, we work primarily with QuickBooks® Pro software, including QuickBooks® Online, and QuickBooks® Desktop. We provide training and ongoing education for clients using QuickBooks.
8. Can you prepare my taxes for me?
In a word: No. Taxes are best prepared by a separate accountant other than your bookkeeper, and one that specializes in tax preparation for your business. This way, you never run afoul of the law, and you don’t overpay your accountant for bookkeeping services. Instead, you take advantage of the unique expertise of each professional.
I process all payroll tax filings and all state tax filings, including State and City B&O (Business & Occupation) taxes. I file 1099s at the end of the year, as well. I prepare the financial statements, so your tax preparer can file the 1040, 1065, and 1120 forms. The tax preparer is also responsible for the K-1’s related to the Partnership and S-Corporation returns.
9. What is a Certified QuickBooks ProAdvisor and what do they provide?
The Intuit QuickBooks® ProAdvisor program trains accounting and bookkeeping professionals in the use and administration of QuickBooks® for a wide variety of clients working in a wide variety of industries.
Once certified, bookkeepers and accountants are prepared to provide clients with QuickBooks® management services, including training and ongoing support. Additionally, certified ProAdvisors have greater access to support on QuickBooks® issues direct from the software manufacturer Intuit.
Intuit, the manufacturer of QuickBooks® Software, also requires the Pro-Advisor to take a test every year in order to verify they are up-to-date with all of the changes in the latest version. The QuickBooks® Pro-Advisor is also provided with a version of QuickBooks® that allows them to work more efficiently with the software. This version offers greater functionality than what is available with the Retail version of QuickBooks®.
For example: the professional version allows the user to correct a group of transactions faster, and to record journal entries much more efficiently, to name just a couple of differences. Most Pro-Advisors have ongoing support to make sure they can handle every question or problem that comes up.
10. How will I transfer data and materials to you so you can do my bookkeeping?
There are several ways that you can transfer data and materials to us. You can use regular mail to send us receipts. You can drop them off at our office, or scan and e-mail them. Many clients find that it’s easiest to provide us with read-only access to their online bank statements and credit card statements. Additionally, if they want very detailed books that show everything purchased, sending us their receipts is best.
However, if they just want categories tracked and are less interested in the individual details, then the online banking system works well.
11. How does the cost of hiring my own in-house bookkeeper compare to outsourcing bookkeeping duties?
Outsourcing of finance and accounting is a long-standing tradition in business, because it makes good business sense and because it is economically beneficial. Outsourcing bookkeeping saves you money in payroll taxes, insurance and other benefits, overhead for office space and machinery, and in down time. Link to Services Page.
12. What is a Fixed Asset? What is capitalization of a Fixed Asset? When do you capitalize?
A fixed asset is a long-lasting tangible piece of physical property purchased and held for use by a company – like a piece of machinery or a vehicle. Capitalizing a fixed asset spreads the expense of that asset out over the years, maximizing its potential benefit to your business. You capitalize an asset when its benefit will last beyond the year in which it was purchased.
13. What is Tax Nexus?
Nexus is also known as the significant physical presence required before you have to collect and/or pay taxes within a state. Having employees working in a state, having a warehouse or office in a state, and having a corporate officer or business partner living in the state are all situations that could trigger nexus; further, if you meet any one of the requirements, this will result in nexus.
It’s best to consult with your bookkeeping professional regarding this issue to insure that you are in compliance with all relevant city and/or state tax laws.